Effects of Corporate Governance on the Performance of State-Owned Enterprises
State-owned enterprises play an important role in economic growth and the delivery of critical public services such as health, education, water, and energy. The underperformance of state-owned enterprises can lead to significant challenges in overa...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/523421534424982014/Effects-of-corporate-governance-on-the-performance-of-state-owned-enterprises http://hdl.handle.net/10986/30282 |
| Summary: | State-owned enterprises play an
important role in economic growth and the delivery of
critical public services such as health, education, water,
and energy. The underperformance of state-owned enterprises
can lead to significant challenges in overall national
growth and competitiveness and pose a fiscal risk to the
government. Consequently, improving the performance of
state-owned enterprises remains an important issue for
policy makers and development practitioners. More recently,
efforts to strengthen corporate governance have been gaining
international momentum as a means to improve the performance
of state-owned enterprises. This study aims to examine the
relationship between corporate governance and the
performance of state-owned enterprises. Using data from 320
state-owned enterprises in the Republic of Korea, the study
examines the effects of corporate governance on various
measures of state-owned enterprise performance, including
performance evaluation results, customer satisfaction, and
financial performance. The empirical results indicate that
board size, corporatization, and transparency and disclosure
are positively related to the performance of state-owned
enterprises, suggesting that they have an impact on the
efficiency of state-owned enterprises. Independence of the
board of directors and separation between the positions of
board chair and chief executive officer have an
insignificant or negative impact on specific measures of
performance. These results suggest that a larger board,
corporatization of state-owned enterprises, and more
transparent disclosure practices can be beneficial for the
performance of state-owned enterprises. |
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